Wednesday, March 27, 2013

Pittsburgh Shows The Promise And Missed Opportunity For CNG Transportation

A CNG fueling station in Pittsburgh is selling natural gas at the equivalent of $1.89 per gallon, while gasoline costs $3.77.  Given prices like those, not too surprisingly, the CNG station has seen soaring demand, up from a tiny 2,000 gallons per month to 15,000 gallons in 1,000 monthly transactions.

Business is indeed booming at the one and only CNG station in Pittsburgh. Going into the 7th year of the Marcellus boom and the 13th year of the shale revolution, the fact that Pittsburgh, in the heart of the Marcellus region, has 1 public CNG fueling station shows the missed opportunity to end our addiction to expensive and dirtier oil that still is about 40% imported.

The fueling market is broken and policy has not responded to the market failure.  And so we keep pumping $3.77 gasoline into vehicles when $1.89 natural gas is available.


  1. How much of an impedement to infrastructure development is the uncertainty surrounding tax credits and subsidies?

    I've long thought that many companies who may be on the fence are inclined to sit there for fear that shortly after they make their investment, large incentives could come down from the govt. and allow competitors to build a competing station for half the cost.

    Slightly unrelated, Snyder Brothers Inc. has their first refueling station up and running here in Armstrong County. They already have about a dozen of their trucks switched over and we'll be looking to bring in our first CNG trucks sometime this summer.

    1. Good to hear about the Snyder Bros station. But PA needs a grid of stations that assures every Pennsylvanian that they can refuel anywhere in PA if they buy a CNG vehicle. It is pathetic that we have nothing close to that grid after 7 years of the Marcellus boom. To get it before another 25 years rolls by, gas utilities will have to be part of rolling out the fueling infrastructure.

  2. Consider a collateral benefit to CNG vehicles: We could finally STOP BUYING OIL FROM OPEC. We cannot bring peace to the Middle East. We cannot force Afghanistan to be a democracy. Let us do something we can do. Stop buying oil from OPEC. We can do it now. Compressed natural gas (CNG) cars. Iran does it. So can we.

    We still import 4 million barrels ($300 million) per day from OPEC. But now, we have the capability to stop all oil imports from OPEC within 60 months. We have low cost natural gas and low cost technology for converting cars to operate on CNG. This program would convert 65 million vehicles (23% of our fleet) to (CNG). Cost $98 billion. The other part of the program is to build 10,000 CNG refueling stations. Cost $20 billion. Total $118 billion. All the costs will be money spent on U.S. labor and material and financed by loans that would be repaid form the $80 billion per year fuel savings.

    The program can start immediately by presidential order to convert the 600,000 federal non-military vehicles to CNG. Theses are shovel/wrench ready projects. Total cost: less than $5 billion.

    This CNG program is not like the Manhattan Project that involved large technical uncertainties and risk. CNG technology is commercially available in the United States. Iran now has 2.9 million vehicles (23% of its fleet) operating on CNG.

    The collateral benefits are manifold: cost savings; reduction in trade deficit; employment for 100,000 Americans; reduced CO2 emissions; low technical, commercial and environmental risks; progress that can be accurately measured; plus no political party would find it objectionable.